Audi: 'We'd be losing customers' without diesel in Australia

Audi Australia has thrown its weight behind diesel engine technology for the foreseeable future, citing “significant volumes” of its TDI models in specific vehicle segments.

Speaking with CarExpert at the launch of the new Q5 SUV, product manager for Audi Australia Peter Strudwicke said there’s still plenty of local demand for turbo-diesel models locally, particularly for SUV models like the Q5.

“We still do significant volumes of diesel,” Mr Strudwicke said.

“You know, buyer types vary particularly as you get out to regional dealers as well – they tend to always ask questions about diesel.

“I don’t think people are scared of diesel [in the Q5’s] segment… looking back previously, just the four-cylinder diesel accounted for 25 per cent [of sales]. That’s a really significant amount of of volume for a big-volume car, so we couldn’t say no to a diesel – we would have potentially been losing customers.”

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Above: 2026 Audi SQ5 + Q5

“And even though the SQ5 has moved to a very efficient petrol, as a diesel it did at least as well as it did as a petrol when we had both – and they both did extremely well,” Mr Strudwicke added.

Head of product at Audi Australia Matthew Dale echoed this sentiment, saying the new 48V MHEV plus system – which allows “limited” EV driving at low speeds like when crawling in traffic or parking – could see diesel become more appealing to even city and suburban customers that would typically opt for one of the company’s petrol SUVs.

“We did the regional dealer meeting in Victoria [recently], and just being an hour out of Melbourne CBD, we asked questions around how the take rates go in terms of mixed percentages [of petrol v diesel],” Mr Dale said.

“An hour out of Melbourne CBD? Diesel. But then you get CBD dealer feedback that the majority of their customer base is petrol.

“Where we do see opportunity is with MHEV plus in the new car, having the diesel powertrain that’s already super efficient… allows seamless mobility between electrification at low speeds and diesel efficiency at higher speeds – that really highlights how far the diesel concept has come in our cars.

Mr Dale was also quick to note the new Q5 TDI’s performance in official fuel tests, where it has achieved 5.4L/100km across urban, extra urban and combined test cycles, largely thanks to the MHEV plus system.

Above: Audi Q5 2.0 TDI 150kW engine

Beyond the Q5 line, Audi’s TDI family of diesel engines remains a strong seller in the larger Q7 and Q8 lineups, and was previously a main fixture in the A8 limousine range locally before it was discontinued in 2024.

Audi Australia has moved away from diesel in smaller segments, however, due to slowing demand at the lower end of the market. Case in point are the Q2 and Q3 SUVs, which both offered diesel engines up until not that long ago. Similarly, the A3, A4, A5 and A6 have all offered TDI models in recent history.

Those trends are largely in line with the overall market, too. Diesel sales were up 8.0 per cent in July thanks to strong dual-cab ute and large SUV sales, though have been in slow, steady decline overall for a number of years. Year to date in 2025, diesel sales are down by 2.7 per cent.

The Mercedes-Benz GLC and Volvo XC60, both rivals to the Q5, have moved away from diesel altogether in Australia, while the BMW X3 only offers a six-cylinder diesel locally in its latest generation.

At the mainstream end of the mid-size SUV segment, only the Kia Sportage has really stuck with diesel – and Kia reports strong sales to boot.

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